The pensions industry largely welcomed the shelving of government plans to relax scheme funding rules in the Budget yesterday, but their attention quickly shifted to a new measure intended to help them – an amendment to the powers of the Pensions Regulator.

After months of complaint from pension funds, and increasingly from their parent companies, that quantitative easing was hurting their finances by pushing down bond yields unnaturally, in December the government suggested "smoothing" their deficit calculations over several years.

But many actuaries and others in the pensions industry had warned the measure could be counter-productive, since by allowing funds to do this, the measure could actually mean they recover less quickly from current low interest rates.

Richard Farr, head of pensions advisory at accountants BDO, said: "The big news is the confirmation that the proposals for smoothing have been shelved, due to an underwhelming response from the respondents to the Government’s call for evidence."

Adam Boyes, a senior consultant at Towers Watson, welcomed the dropping of the idea: "The proposals for smoothing had a lot of rough edges and could actually have made deficits look bigger in future, by keeping today’s low interest rates in funding calculations for longer than necessary - prolonging the pain for employers."

James Mullins, a partner at Hymans Robertson, was even more pleased: "Tinkering with the measurement just because the answer it gives isn't palatable is in nobody's interests. Companies, trustees and employees will be better served by shifting the emphasis towards a long-term risk management framework. The Chancellor’s announcement means industry can move on from this distraction.”

However, the government also announced it would give the government’s Pensions Regulator – which oversees final-salary pension schemes – a new statutory duty to consider a company’s need for “sustainable growth”.

This follows criticisms that the Regulator is too keenly focused on ensuring pension-fund solvency at all costs, without regard to the finances of the company supporting the scheme.

The industry was left waiting for more detail on this new proposal, and opinion seemed split on its significance. Farr said it represented a "clear shift in the balance of power" in funding negotiations between companies and pension trustees, in the companies' favour.

He said: "The majority of defined-benefit scheme sponsors will want to argue that sustainable growth requires greater investment in their business, and thus lower contributions to fund pension deficits. Larger deficits mean less security for members, and a heightened chance that schemes end up cutting benefits and being dumped in the Pension Protection Fund."

But Sarah Brown, head of scheme funding research for Punter Southall, said it was "unlikely to fundamentally alter the way trustees and sponsors negotiate the level of recovery plan contributions."